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Msg  2655 of 2664  at  11/18/2008 6:51:22 PM  by


Online Spending

From the WSJ.



Online Spending Growth Slows Sharply Amid Economic Gloom

Online retail spending grew only 1% in October from a year ago, following a downward trend that started late last year, according to market research firm comScore Inc. The spending slowdown is happening as mid-to-lower income families that make less than $50,000 a year have stopped spending online, the study says.

While households that earn $50,000 a year or more increased their online spending, growth was slower than in previous years. Households that have income of $50,000 to $100,000 a year account for 45% of e-commerce dollars, and only increased their spending by 1% in the three months ending in October.

"I think it's clear that consumers have less disposable income and as a result, ecommerce is going to suffer," says Andrew Lipsman, a senior manager at comScore. "I think it's safe to say we aren't going to see growth rates anywhere near to what we've seen in past years."

The news doesn't bode well for large ecommerce companies such as Inc. and eBay Inc. EBay last month reported quarterly revenue at the low end of its forecast, as the San Jose, Calif., company announced layoffs of 10% of its work force, or roughly 1,000 employees and 600 temporary workers. John Donahoe, eBay's chief executive, has pushed a series of changes across the auction Web site including increasing its share of fixed price items for sale and offers of free shipping. has fared better than eBay, but recently lowered its full-year guidance and reported a wide revenue forecast for its current quarter, indicating the Seattle-based company has limited visibility into how it will perform during the holiday season.

Lazard Capital Markets analyst Colin Sebastian, in a note this week, lowered estimates for Amazon's fourth quarter sales to $6.5 billion from $6.6 billion, citing channel checks that indicated weak spending online. "We note that the company remains in a period of high uncertainty with slowing growth and declining incremental margins," Mr. Sebastian said in the note.


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Msg # Subject Author Recs Date Posted
2656 Re: Online Spending / OT re:computer justalotofguesswork 0 11/19/2008 11:07:50 AM

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